The High Court dismissed a writ petition challenging a notice issued under the SARFAESI Act. The court held that the petitioner had an alternative remedy before the Debts Recovery Tribunal and highly disputed facts were involved, warranting dismissal under Article 226.
Writ petition dismissed on the ground of alternative remedy.
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Court No. - 39
Case :- WRIT - C No. - 26730 of 2020
Petitioner :- M/S Chaudhary Tyre House Respondent :- State of U.P. and Another Counsel for Petitioner :- Prem Chandra Dwivedi Counsel for Respondent :- C.S.C.,Krishna Mohan Asthana
Hon'ble Naheed Ara Moonis,J. Hon'ble Dinesh Pathak,J.
Heard learned counsel for the petitioner, learned Standing Counsel on behalf of respondent no. 1 and Shri K.M.Asthana, learned counsel appearing on behalf of respondent no. 2.
The instant petition has been filed seeking following reliefs :
"(i) Issue an order or direction in the nature of certiorari quashing the Notice dated 10.11.2020 issued by respondent no. 2 against the petitioner (Annexure No. 1 to the writ petition),
(ii) Issue a writ, order or direction in the nature of mandamus commanding and directing the respondent no. 2 not to take any coercive action against the petitioner in pursuance of Notice dated 10.11.2020 issued by the respondent no. 2."
Learned counsel for the respondent-bank, has raised a preliminary objection that against the proceedings initiated under Section 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the "SARFAESI Act"), the petitioner has remedy to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act.
The said contention raised by the learned counsel for the respondent-bank has not been disputed by the learned counsel for the petitioner.
We have considered the submissions made at the bar.
The Hon'ble Supreme Court in the case of ICICI Bank Ltd. v. Umakanta Mohapatra , Civil Appeal Nos. 1024310250 of 2018, decided on 05.10.2018 , has held as under:
"Delay condoned.
Leave granted.
Despite several judgments of this Court, including a judgment by Hon'ble Mr. Justice Navin Sinha, as recently as on 30.01.2018, in Authorized Officer, State Bank of Travancore and Another VS Mathew KC., (2018) 3 SCC 85, the High Courts continue to entertain matters which arise under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), and keep granting interim orders in favour of persons who are Non-Performing Assets (NPAs).
The writ petition itself was not maintainable, as a result of which, in view of our recent judgment, which has followed earlier judgments of this Court, held as follows:-
18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. Vs Prem Heavy Engineering Works (P) Ltd and another, (1997) 6 SCC 450, observing:-
32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."
The writ petition, in this case, being not maintainable, obviously, all orders passed must perish, including the impugned order, which is set aside.
The appeals are allowed in the aforesaid terms. Pending applications, if any, shall stand disposed of." Recently the Hon'ble Apex Court in the case of C.Bright Vs. The District Collector & others, Civil Appeal No. 3441 of 2020 decided on 05.11.2020 has observed as follows:
"21. Even though, this Court in United Bank of India v. Satyawati Tondon & Ors., (2010) 8 SCC 110 held that in cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious
adverse impact on the financial health of such bodies/institutions, which will ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Hindon Forge Private Limited has held that the remedy of an aggrieved person by a secured creditor under the Act is by way of an application before the Debts Recovery Tribunal, how- ever, borrowers and other aggrieved persons are invoking the jurisdiction of the High Court under Articles 226 or 227 of the Constitution of India without availing the alternative statutory remedy. The Hon'ble High Courts are well aware of the limitations in exercising their jurisdiction when effective alternative remedies are available, but a word of caution would be still necessary for the High Courts that interim orders should generally not be passed without hearing the secured creditor as interim orders defeat the very purpose of expeditious recovery of public money.
22. Thus, we do not find any error in the order passed by the High Court. Consequently, the appeal is dismissed."
In view of the availability of alternative remedy and since highly disputed questions of facts are involved, we are not inclined to exercise extraordinary jurisdiction of Article 226 of the Constitution of India to entertain this writ petition.
Accordingly, the writ petition is dismissed on the ground of alternative remedy.
Order Date :- 1.2.2021 VR/
2 issues framed by the court
Whether the High Court can entertain a writ petition quashing a notice issued under Section 13(2) and 13(4) of the SARFAESI Act when an alternative remedy is available.
Whether the writ in this case is maintainable given the existence of a statutory remedy before the Debts Recovery Tribunal.
Colour shows how this judgement treated each authority
ICICI Bank Ltd. v. Umakanta MohapatraReferred¶12
ICICI Bank Ltd. v. Umakanta Mohapatra, Civil Appeal Nos. 1024310250 of 2018, decided on 05.10.2018
Authorized Officer, State Bank of Travancore and Another v. Mathew KC.Referred¶15
Authorized Officer, State Bank of Travancore and Another VS Mathew KC., (2018) 3 SCC 85 · Who else cites this
Dwarikesh Sugar Industries Ltd. vs Prem Heavy Engineering Works (P) LtdReferred¶17
Dwarikesh Sugar Industries Ltd. Vs Prem Heavy Engineering Works (P) Ltd and another, (1997) 6 SCC 450 · Who else cites this
United Bank of India v. Satyawati TondonReferred¶21
United Bank of India v. Satyawati Tondon & Ors., (2010) 8 SCC 110 · Who else cites this
Hindon Forge Private LimitedReferred¶22
Hindon Forge Private Limited
C.Bright v. The District CollectorReferred¶20
C.Bright Vs. The District Collector & others, Civil Appeal No. 3441 of 2020
3 provisions across 2 enactments
M/S Chaudhary Tyre House
State of U.P.
Bank (Respondent No. 2)
Naheed Ara Moonis
Dinesh Pathak
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
